According to a report by CryptoQuant, Bitcoin network activity has reached its lowest level in a year, hinting at a potential price drop to $86,000.
Negative Trend in Bitcoin Network Activity
The Bitcoin Network Activity Index, measuring metrics like active addresses, transactions, and block size, has decreased by 17% from its November 2024 record high. The current level is 3,658, the lowest since February 2024. It has fallen below the 365-day moving average, which hasn't occurred since China's Bitcoin mining ban in July 2021.
Weak Demand for Bitcoin
Bitcoin demand is weak, as evidenced by declining purchases in the Bitcoin ETF market. Currently, daily ETF purchases have gone down from over 18,000 BTC in early November to less than 1,000 BTC.
Future of Bitcoin
Stablecoin liquidity expansion has slowed. The total market cap of stablecoins has increased to over $200 billion, although their liquidity is expanding slowly. Without a new wave of liquidity, BTC could drop to $86,000.
In conclusion, declining network activity and weak demand could lead to further price drops. Crypto enthusiasts should pay attention to the market developments.
